Vodafone Idea To Raise Up To Rs 4,500 Crore From Promoters

Vodafone Idea Ltd. approved raising up to Rs 4,500 crore from its promoters as the struggling carrier looks to strengthen its balance sheet and invest in network infrastructure after availing a government bailout.

The telecom operator’s board approved issuing 338.35 crore equity shares on a preferential basis to Vodafone Group firms Euro Pacific Securities Ltd. and Prime Metals Ltd.; and Aditya Birla Group’s Oriana Investments Pte., according to its exchange filing.

The shares will be issued at Rs 13.3 apiece, including a premium of Rs 3.3 per share. The issue price is at a 10% premium to the floor price of Rs 12.08 per share.

That fundraising will lead to an overall equity dilution of 10.53%, with promoter stake falling to 74.99% before conversion of interest due to the government into equity.

The board also approved raising Rs 10,000 crore via private placement or qualified institutions placement by issuing securities like Global Depository Receipts, American Depository Receipts, foreign currency convertible bonds, convertible debentures, and warrants.

The fundraising is subject to shareholder approval and the board has convened an extraordinary general meeting on March 26.

Vodafone Idea needs funds for investment in 5G networks and to service debt that stood at Rs 1.97 lakh crore as of December 2021.

The wireless carrier earlier agreed to avail the government's four-year freeze on spectrum instalments and adjusted gross revenue dues and converted the interest due into equity. That would give the government nearly 36% stake in the carrier.

Earlier this month, it agreed to sell 4.7% stake in Indus Towers Ltd. firm to its rival Bharti Airtel Ltd.